Tuesday, 16 October 2012

This project is now officially over - thank you to all my investors who supported me with their money.

So lets start with a recap... This project began in May. FCV at the time had 13b of cash and assets and then sold 67 shares (at 1b a piece) raising 67b, bringing the total to 80b starting assets.

For the sake of simplicity, I have since then assumed that I 'bought in' 13 shares as I provided 13b of the starting capital. That way I too would benefit from the profits.

So in May 2012:

13 shares (13b) owned by Cheeba

67 shares (67b) owned by investors

So, let's start by looking at FCV's final financial statement first of all:

Summary:

It's been a good final month! The last month's profits come in at 40.9 billion ISK. This is higher than the month's 'actual' profits and is reflective of the fact that I had underestimated the value of some of the assets I was holding in previous month. Having sold all unwanted assets now from the the fulleride towers, I can confirm that the above values are indeed final and accurate.

Overall - for the 22 odd weeks that this project ran, FCV generate 92.1 billion ISK of profit, more than I ever expected to be brutally honest. With the 80 billion ISK of starting capital, I averaged 16.54% increase in value each month and ended up more than doubling the value of FCV.

Payouts:

So, its time to repay my investors. Given the exceptional performance of FCV, I have decided that from the total profits of 92.1 billion ISK I will be taking a 20 billion ISK management fee in addition to the profit from my own investment. In addition, 2.1 billion ISK will be donated to Vaerah Vahrokha Emergencies Relief Trust. This leaves 70 billion ISK to be divided between investors as shown below:

Therefore, each FCV share's final value is 1.875 billion ISK.

Payouts will starting happening over the next 24-48 hours.

ISK will be sent to the owners of the shares as I can see in the FCV corp wallet.

Thank you all for your support - and stay tuned for a potential new investment project in the near future ;)

Wednesday, 26 September 2012

One of the original reasons I started up the IPO almost 6 months ago was to raise capital to get a good set of fulleride towers running. At the time, technetium (which is required in the fulleride reaction) was around 200,000 isk pu, so to get the reactors rolling I needed 125,000 units just to fill the silos, so 200,000*125,000 = 25,000,000,000 bill. But Im getting ahead of myself. Lets start at the beginning.Why Fullerides? I chose fullerides because reactions that require technetium have the highest requirement for startup capital, presenting a high barrier to entry to enter production. Unless you have your own tech moon, you need to buy tech in Jita and as just mentioned, to set up my 10 towers, I needed 25b in tech alone.Therefore the reactions involving tech products, having the highest barrier for entry, also tend to have the highest profit margins. You can get an idea of what profit is to be made by checking websites such as this one.However, tech is a fickle material. With constant wars over tech moons, plus the possible constant threat of 'iterations' (such as the nerf we saw in august that over halved its price), there is considerable risk involved and prices (and profit margins) do jump around.Tower setup and locationI set up my towers in Black Rise. Caldari lowsec is pretty crowded, but given that nearly all tech is traded through Jita, being close to that hub was important to me.I had 10 large caldari towers in total. Caldari larges are the only towers capable of having the cpu to support enough reactors. You will need inside each tower: 6 silos, 2 reactors. You will have some powergrid left over for some small guns, but absolutely no CPU spare for webs, points, shield hardeners etc. So your main defense in lowsec is to be quiet and not piss anyone off. My setup was as follows. In towers 1-5 I had platinum (silo 1) and technetium (silo 2) reacting (reactor A) into platinum technite (silo 3). In silo 4 we have carbon polymers which react (reactor B) with the platinum tecnite in silo 3 to produce fullerides (which fill silos 5 and 6).In towers 6-10, I had the same set up, but with hydrocarbons and silcates reacting to form carbon polmers, which in turn react with platinum technite to produce fullerides. Tower MaintenanceEvery 3 days, you need to take a freighter or JF and tend to the towers. You alternate between either just emptying the fullerides or emptying fullerides and filling up all the ingredients again. The reason I have 2 sets of 5 towers is that the simple reactions (ie plat + tech = plat tech) produce 200 units of plat tech/carbon polymers per hour. Only 100 units are consumed per hour by the fulleride reaction, so the plat tech/carbon polymers that are extra can be hauled to the other set of 5 towers. That way I never need to buy plat tech or polymers off the open market. Thus people usually run reaction towers in multiples of two, with this complimentary setup style.A JF is really a requirement if you plan on running two towers or more, or else you will spend all day going back and forth between station and POS. However, most imporantly, you will need it to haul materials and fuel back and forth from highsec to lowsec. Tending to 10 towers with a JF takes 30-45 mins every 3 days. Then add time for hauling, buying and selling materials. Once the inital setup, the profit for time spent is great, but as I said, the startup capital was pretty intense. The particular 10 tower chain I have was purchased from my old corp for around 45 billion. But since owning it, it has given me probably over 20b profit, maybe 50% more than that (I will have better numbers when I close this bond up, and have tallied up all my data). And that includes a prettty brutal period of loss when tech crashed in august. If you have any other questions of how to run, setup or maintain towers, feel free to poke me.

Sunday, 9 September 2012

Its time for the Month 4 Profit Report. It's been a slow month, but we've still ended green despite some RL setbacks. As ever, lets start with this month's snapshot:

Summary:

The profits for the 4th month come in at 7b and represents an increase in the value of FCV of 5.64% from the previous month, or 64% since the project began.

Discussion:

While Month 4's profits did not hit the double digit billions, a comfortable 7b was produced. Generated profit came mostly from manufacturing as margins from the reaction towers continues to swing as tech struggles to find a new equilibrium.

Overall profit wasn't as high for a few RL reasons. First of all the PSU on my laptop died meaning I was out of action for a week. Towers and silos were not attended to and manufacturing went on hiatus. An estimated 35b of revenues (3-4b profit) was therefore missed out on. For about 3 weeks as well I was hit with several wardecs which made logistics a bit harder. Despite these setbacks, the month went relatively well, especially considering the slowdown that always accompanies summer.

Outlook:

As long as no more computer issues arise (PSU is now replaced), this month looks to be relatively straight forward. Profit goal is 10bill + which should be attainable.

Monday, 6 August 2012

Its time for the Month 3 Profit Report. It's been a difficult month, but let's first start with some numbers from today's snapshot.

Summary:

The profits for the 3rd month come in at 2b and represents an increase in the value of FCV of 1.64% from the previous month, or 54% since the project began.

Discussion:

This past months profits have been pushed to almost nil by the technetium nerf and I apologize on behalf of FCV for this poor performance. As some of you will know, this past month tech went from 200,000 isk/pu to 80,000 isk/pu. Given that I run some rather large reaction chains, I tend to have around 100-150,000 units of tech stockpiled at any one time. That meant in a matter of days the value of that stockpile went from 30b to around 13b. In addition, reaction products dived and sold for under production cost. All in all, bit of a nightmare. I did what I could to mitigate losses, even traded the tech panic selling to claw back some ISK, but after the dust settled, I estimate my final losses from the nerf were around 20bill, and that is a conservative estimate. Also, to add salt to the wound, some griefer corp is maintaining a constant wardec against my alt corp hoping for a payout. Not an issue, but makes logistics annoying!

On the good news front, T1 and T2 manufacturing had another strong month. On the back of their sales, FCV still managed to claw a profit for the month. A small one, but at least a profit nonetheless! Sales turnover is slower this month because of summer holiday, but margins remain good.

Outlook: While it has been a painful month, the worst is over. Prices have stabilised and hopefully August sees less turmoil in the tech market. I hope that despite the slower rate of sales in the summer months, FCV can return to double digit billion profits next month.

Other notes:

- 500mill was donated to the Fearless ATX tournament fund, as they are dudes. They even named their vulture after me :)
- As I had spare liquidity, I invested 12b of FCV cash into buying a T2 bpo that I wanted. That 12b will remain apart of FCV assets.

Tuesday, 17 July 2012

Everyone likes to be the next sell order. That's why people 0.01 isk each other constantly.

This is especially important when the market is at a high. This could be due to a manipulation or natural market cycles, but sometimes sell prices are providing super high margins and its worthwhile to babysit sell orders to make sure that when players make purchases, they are buying your goods.

So there are two key strategies to maximise this:

(1) Multiple Sell Orders

A market order can only be modified once every 5mins. This is very restricting in the most competitive markets. As such, split up your stock in stacks, so you can modify orders more often. More tedious and more work, but sometimes worth it.

(2) Be Aggressive

The best pvpers never undock! Sometimes when you are in a 0.01isk war, you can drive the price down to a point where its profitable or advantageous to buy out the competition and relist their stock. Sometimes you can turn a decent profit, other times you only break even but you can go to bed knowing that you will not be undercut as soon as you log off.

To illustrate with a very small example (note: on my market window, I sort sell orders so the cheapest is on top)

I was babysitting some cap mods - I had little stock left and wanted to clear it at a good sell price:

I had the market to myself for a long while, but then a new sell order popped up.

When new orders appear, they often aren't monitored in the cap module market, so I assumed I could quickly undercut. But alas, this guy was obviously monitoring his sell orders. Ah well. let the 0.01isking commence.

Eventually I realised given the slow turnover of the cap module market, that this guy wasn't going to give up. Ah well, I wanted to go out. Time to be more drastic. I dropped the price by 100,000 isk/pu

Maybe that big drop would put him off. Nope:

Hrmm. He's keen to follow me down. Let's take this further and cut a whole million of the sell price... and what do you know, he cuts his sell price by a whole million as well.

Well if he is keen to make a sale, a sale he shall make:

And now the market is back under my control - and I will resell his mods for a profit:

K thnx bye!

One word of warning, I have bought out competitors and relisted and gone to bed in control of the market, only to next log in to see my sell orders drowned in a sea of new ones!

Thursday, 12 July 2012

Anyone who has sold anything in a hub will know the frustration of sellers constantly 0.01isking each other. Its frustrating and drives many traders and manufacturers away from the industry.

However in my experience, while many people mindlessly chase the sell price down desperate to make a sale, being aware of the larger market perspective can help you make better informed choices on how to sell your goods. Having sold a lot of stuff in Jita, I thought I would share some tips on when to join in or avoid the 0.01 isk wars depending on whether you are a trader or a builder.

So to 0.01 ISK or not to?

(1) Know your item

Sounds obvious but are you clear on what the exact cost was to build your item? Many people sell at build cost or below - why? They are liquidating assets/they got it for free/they don't know better. This is a buying opportunity for traders. For builders, figure out the sell price that you want and stick to it - there are very few reasons to sell at a loss and the market might currently be oversupplied, but the prices will rise again. An example is below - in pink are manufacturers who know what a profitable sell price is. Everything cheaper (ie above the pink) is being sold at a low price and would be a good target for traders to buy up and relist at the same price as the manufacturers.

(2) Know your sales/brokers tax:

Its incredibly important. For example - I build 50 drakes. They cost 46mill per unit to build. The market is pretty saturated so the current sell price is only 47mill. I think to myself "Ok - not great margins but if I sell the drakes I'll make a tidy 50mill profit".

However, with my brokers and sales tax at 0.61 and 0.75% respectively, I pay almost 34mill in taxes, leaving me with a final profit of 16mill - a terrible return on ~2.3bill invested to build the ships. Unless you are desperate for liquidity, wait for prices to increase.

(3) Redefine the Sell Price:

Ive discussed it in earlier posts - but if prices are trending slowly down, but the volume on the market is low - traders should buy up stock and redefine the sell price. Below is an example with nagas:

Buy up those lower-priced ships and voila - relist:

The best part is that the new price point can stick - meaning the resale profits remain good for traders and the margins remain good for manufacturers producing that product:

(4) Know the mineral basket price index:

This is critical. As a trader or builder, you need to know which way the market is moving. If the Mineral Price Index (MPI) is trending down, then you might want to start 0.01isking. With the MPI dropping, the price of produced goods will follow.